[House Report 106-1054]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
 2d Session             HOUSE OF REPRESENTATIVES               106-1054

_______________________________________________________________________

                                     

                                                 Union Calendar No. 616




SURVEY OF ACTIVITIES OF THE PERMANENT SELECT COMMITTEE ON INTELLIGENCE 
                       DURING THE 106TH CONGRESS

                               __________

                              R E P O R T

                                 of the

               PERMANENT SELECT COMMITTEE ON INTELLIGENCE




January 2, 2001.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed



                    U.S. GOVERNMENT PRINTING OFFICE
89-006                      WASHINGTON : 2001





                         LETTER OF TRANSMITTAL

                              ----------                              

                          House of Representatives,
                Permanent Select Committee on Intelligence,
                                   Washington, DC, January 2, 2001.
Hon. J. Dennis Hastert,
Speaker of the House,
The Capitol, Washington, DC.
    Dear Mr. Speaker: Pursuant to the Rules of the House, I am 
pleased to transmit herewith an activity report of the 
Permanent Select Committee on Intelligence, titled ``Committee 
Activity Report for the 106th Congress.'' The report includes a 
summary of oversight activities and findings of the Committee 
during the course of the 106th Congress.
            Sincerely yours,
                                          Porter J. Goss, Chairman.
                                                 Union Calendar No. 616
106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                    106-1054

======================================================================



 
SURVEY OF ACTIVITIES OF THE PERMANENT SELECT COMMITTEE ON INTELLIGENCE 
                       DURING THE 106TH CONGRESS

                                _______
                                

January 2, 2001.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Goss, from the Permanent Select Committee on Intelligence, 
                        submitted the following

                              R E P O R T

    This report covers the activities of the House Permanent 
Select Committee on Intelligence during the One Hundred Sixth 
Congress. Porter J. Goss (Republican, Florida) served as 
Chairman; Julian C. Dixon (Democrat, California) served as the 
Ranking Member.
    The stated purpose of H. Res. 658 of the 95th Congress, 
which created the House Permanent Select Committee on 
Intelligence, was to establish a committee ``to oversee and 
make continuing studies of the intelligence and intelligence-
related activities and programs of the United States Government 
and to submit to the House appropriate proposals for 
legislation and report to the House concerning such 
intelligence and intelligence-related activities and 
programs.''
    H. Res. 658 also indicated that the Committee ``shall make 
every effort to assure that the appropriate departments and 
agencies of the United States provide informed and timely 
intelligence necessary for the executive and legislative 
branches to make sound decisions affecting the security and 
vital interests of the Nation. It is further the purpose of 
this resolution to provide vigilant legislative oversight over 
the intelligence and intelligence-related activities of the 
United States to assure that such activities are in conformity 
with the Constitution and the laws of the United States.''
    In carrying out this mandate, the Committee divided its 
responsibilities among two subcommittees:

 Subcommittee on Human Intelligence, Analysis, and Counterintelligence

Bill McCollum (R-Florida), Chairman Alcee L. Hastings (D-Florida), 
                                    Ranking Member
Charles F. Bass (R-New Hampshire)   Nancy Pelosi (D-California)
                                    Norman Sisisky (D-Virginia)
Jerry Lewis (R-California)          Gary A. Condit (D-California)
Jim Gibbons (R-Nevada)
Ray LaHood (R-Illinois)
Heather Wilson (R-New Mexico)

          Subcommittee on Technical and Tactical Intelligence

Michael N. Castle (R-Delaware), 
Chairman                            Sanford D. Bishop, Jr. (D-Georgia), 
                                    Ranking Member
Sherwood L. Boehlert (R-New York)   Tim Roemer (D-Indiana)
                                    Gary A. Condit (D-California)
Charles F. Bass (R-New Hampshire)   Norman Sisisky (D-Virginia)
Jim Gibbons (R-Nevada)
Ray LaHood (R-Illinois)
Heather Wilson (R-New Mexico)

                       SCOPE OF COMMITTEE REVIEW

    U.S. intelligence and intelligence-related activities under 
the jurisdiction of the Committee include the National Foreign 
Intelligence Program (NFIP), the Joint Military Intelligence 
Program (JMIP), and the Department of Defense Tactical 
Intelligence and Related Activities (TIARA).
    The National Foreign Intelligence Program consists of 
activities in the following departments, agencies, or other 
intelligence elements of the government: (1) the Central 
Intelligence Agency (CIA); (2) the Department of Defense (DOD); 
(3) the Defense Intelligence Agency (DIA); (4) the National 
Security Agency (NSA); (5) the National Reconnaissance Office 
(NRO); (6) the National Imagery and Mapping Agency (NIMA); (7) 
the Departments of the Army, Navy, and Air Force; (8) the 
Department of State; (9) the Department of Treasury; (10) the 
Department of Energy; and (11) the Federal Bureau of 
Investigation (FBI).
    The JMIP was established in 1995 to provide integrated 
program management of defense intelligence elements that 
support defense-wide or theater-level consumers. Included 
within JMIP are aggregations created for management efficiency 
and characterized by similarity, either in intelligence 
discipline (e.g., Signals Intelligence and Imagery 
Intelligence) or function (e.g., satellite support and aerial 
reconnaissance). the jurisdiction in programs comprising JMIP 
also fall within the jurisdiction of the House Committee on 
Armed Services.
    The TIARA programs are a diverse array of reconnaissance 
and target acquisition programs that are a functional part of 
the basic military force structure and provide direct 
information support to military operations. TIARA, as defined 
by the Joint Chiefs of Staff and the Secretary of Defense, 
include those military intelligence activities outside the 
defense intelligence programs that respond specifically to 
requirements of military commanders for operational support 
information, as well as to national command, control, and 
intelligence requirements. The programs comprising TIARA also 
fall within the jurisdiction of the House Committee on Armed 
Services.

                          OVERSIGHT ACTIVITIES

    During the 106th Congress, the House Permanent Select 
Committee on Intelligence (HPSCI), under the leadership of 
Chairman Porter J. Goss and Ranking Member Julian C. Dixon, 
has--
          Promoted a bipartisan effort to continue rebuilding 
        and refining the nation's intelligence capabilities to 
        meet increasingly complex geopolitical and 
        technological challenges to national security;
          Advanced the education of Members of Congress and the 
        public on matters of vital interest to national 
        security and the distinct role intelligence plays in 
        its defense;
          Worked to promote cooperation and trust with other 
        committees in performing oversight of issues that 
        implicate matters of joint jurisdiction such as 
        terrorism, narcotics, proliferation, etc.; and
          Worked diligently to address security and 
        counterintelligence weaknesses that were apparent 
        within the Intelligence Community and other components 
        of Executive Branch Departments.
    The Committee is concerned that our intelligence 
capabilities have become increasingly fragile since the breakup 
of the Soviet Union, and we have failed to invest in new 
capabilities that are now critical. American interests have 
expanded, new threats have evolved, and the priority placed on 
intelligence and the role of the Intelligence Community has 
grown significantly. For the President and senior policymakers, 
intelligence forms the basis for key foreign policy strategies 
and decisions and allows insight into whether those policies 
are working. Intelligence is also meant to supply the necessary 
indication and warning information that allows the President to 
forestall problems rather than simply react to crises. For the 
military, intelligence not only provides information critical 
to a commander, but also is now a critical part of military 
operations, including the functioning of some of the weapon 
systems themselves.
    Intelligence is the first line of defense. Human 
intelligence (HUMINT) and signals intelligence (SIGINT), in 
particular, provide direct and immediate threat data to 
personnel who risk their lives on a daily basis. Numerous 
examples include: our ground forces in Kosovo, our pilots 
conducting Northern and Southern watch missions in Iraq, our 
troops on the border between North and South Korea, our forces 
engaged in counter-narcotics operations in Latin American, and 
our Naval forces deployed across the oceans.
    The Committee's budget authorizations and recommendations 
reflect the Committee's concern that the U.S. is placing undue 
risks on its armed forces and its national security interests 
by not redressing the many crucial problems facing the 
Intelligence Community. The Committee has highlighted not only 
areas of greatest immediate priority, but also stressed the 
need for enhancing global coverage areas to rebuild important 
indications and warning capabilities. In particular, the 
Committee applied considerable focus and provided several 
recommendations in the following areas: recapitalizing SIGINT 
and promoting NSA modernization initiatives; building a 
stronger and more extensive clandestine HUMINT capability and 
increasing funding in operations, training, and technical 
capabilities; furthering efforts to utilize effectively the 
capabilities of new imagery satellites in the next decade and 
promoting successful use of commercial resources; and, 
developing a new strategy for the U.S. Intelligence Community 
to increase the efficiency and interoperability of costly 
communications systems.
    In its efforts to increase investment in vital elements of 
the Intelligence Community, the Committee finds that it is 
imperative that the Administration take greater responsibility 
in forming a sound intelligence budget. In particular, the 
Committee has recommended that the President, the DCI, and the 
Secretary of Defense reexamine the basic processes used to put 
together the yearly budget request in an effort to better 
address national security needs. Along with a new approach to 
budgeting by the Administration, it is the hope of the 
Committee that efforts will be made for better communication 
and coordination among the departments and agencies of our 
intelligence apparatus, allowing them to successfully function 
as a true ``community.''

       INTELLIGENCE AUTHORIZATIONS FOR FISCAL YEAR 2000 AND 2001

    During the 106th Congress, the Committee furthered its 
objectives of rebuilding and revitalizing our national 
intelligence capabilities to better meet the threats of the 
21st century. With bipartisan support, the Committee sought to 
provide the resources necessary to ensure that our policymakers 
and military commanders have timely and reliable intelligence 
support that is crucial to our nation's security.
    The Committee reviewed extensively the President's budget 
submissions for Fiscal Years 2000 and 2001, fulfilling its 
responsibility to closely examine the nation's intelligence 
programs and proposed expenditures. These reviews included 
substantive and programmatic hearings, Member briefings, and 
numerous staff briefings. Testimony on the President's budget 
submission was taken from the Director of Central Intelligence 
(DCI); the Director of Central Intelligence for Community 
Management (DDCI/CM); the Assistant Secretary of Defense for 
Command, Control, Communications, and Intelligence (ASD/C31); 
the Directors of DIA, NSA, NIMA, NRO, and the FBI; and other 
major intelligence program managers.
    The Committee's examination of the President's Fiscal Years 
2000 and 2001 intelligence budgets included 20 full committee 
budget-related hearings, including sessions on Covert Action 
and Support to Military Operations. Additional hearings 
addressed the DCI's overall budget submission, the state of 
health of the Intelligence Community, and the DCI's views and 
plans for the future of intelligence and the Intelligence 
Community. In addition to budget-related hearings, the 
Committee held 19 full committee hearings and 29 full committee 
briefings on various issues vital to our Intelligence Community 
and national security. Among the subjects examined by the 
Committee were: developments in Russia, Colombia, and Iraq; 
lessons learned from Kosovo; intelligence collection issues; 
and State Department and Department of Energy security and 
counterintelligence practices.
    The Committee believes that intelligence needs to be a 
higher priority in the competition for budgetary resources 
within the Executive Branch and the Congress. Increasing 
resources for and emphasis on intelligence will ensure that the 
nation is better prepared for the global challenges that will 
confront us in the years to come.
    The Committee's immediate concern continues to be the 
health and welfare of our signals intelligence (SIGINT) 
resources and capabilities. The January 2000 ``crash'' of 
National Security Agency computers highlighted the 
infrastructure deficiencies, failed management, and lack of 
sufficient acquisition processes and expertise that have 
plagued the NSA. The Director of NSA has undertaken important 
efforts to address these critical issues. The Committee, in 
general, supports these initiatives, and has taken specific 
steps within the budget authorizations of this Congress to 
support the Director of NSA and help rectify these problem 
areas.
    In the last two budget authorization bills, the Committee 
invested significant resources in human intelligence (HUMINT) 
and signals intelligence (SIGINT). In the area of imagery 
intelligence (IMINT), the Committee directed the defense and 
intelligence communities to develop and fund the tasking, 
processing, exploitation, and dissemination (TPED) activities 
necessary to utilize the Future Imagery Architecture (FIA) 
program under development by the National Reconnaissance Office 
(NRO). In addition, during the 106th Congress, the Committee 
has sought to correct the serve counterintelligence and 
security failures that had become shockingly evident at the 
Departments of Energy and State.
    The ``Intelligence Authorization Act of Fiscal Year 2000 
(P.L. 106-120)'' in addition to authorizing generally the 
activities of the U.S. Intelligence Community included a 
provision to protect the identity of retired covert agents. 
This provision increased penalties imposed upon those who 
willfully disclose agents' identities. In addition, P.L. 106-
120 required a joint report from the Directors of the CIA, the 
NSA, and the Attorney General providing a detailed analysis of 
the legal standards employed by elements of the intelligence 
community in conducting signals intelligence activities, 
including electronic surveillance. The bill also required a 
report from the Director of Central Intelligence on the 
activities of the CIA in Chile.
    The ``Intelligence Authorization Act of Fiscal Year 2001 
(P.L. 106-567)'' in addition to authorizing the intelligence 
activities of the U.S. Intelligence Community included a 
provision requiring the DCI to certify that the State 
Department is in full compliance with all applicable Director 
of Central Intelligence Directives (DCIDS) relating to the 
handling, retention, or storage of classified information. In 
addition, the bill contained a subtitle addressing management 
reorganization of the Diplomatic Telecommunications Service 
Program Office (DTS-PO), including the creation of a Diplomatic 
Telecommunications Service Oversight Board. Title VI, the 
``Counterintelligence Reform Act of 2000'' is intended to 
improve coordination within and among the U.S. Government 
agencies investigating and prosecuting espionage cases and 
other cases affecting national security. Title VII of the bill, 
the ``Public Interest Declassification Act'' provides for a 
systematic, coordinated, and comprehensive review of policy for 
declassification of records and materials that are of 
extraordinary public interest. Of key significance for the 
transformation of NSA, a provision was included that provided 
the Director of NSA with the ability to offer early retirement 
incentives to NSA personnel, including senior employees. 
Finally, the initial conference report submitted to the 
President for signature, contained a provision that would have 
provided additional criminal penalties for unauthorized 
disclosure by U.S. government employees and former U.S. 
government employees of classified information, and a provision 
that restricted the manner in which the NRO contracted for 
launch vehicles.
    On November 4, 2000, the President vetoed the initial 
conference report (H. Rept. No. 106-969) expressing concern 
regarding the provision on unauthorized disclosure (the so-
called ``leaks'' provision). This veto came despite support for 
the provision by the Department of Justice and an articulation 
of support for the Senate's managers amendment containing the 
provision in the statement of Administration Policy dated 
October 10, 2000. The House referred the vetoed conference 
report back to HPSCI. Chairman Goss, Vice-Chairman Lewis, and 
Ranking Democrat Dixon introduced a new intelligence 
authorization bill (H.R. 5630) that was identical to H.R. 4392, 
absent the ``leaks'' provision. Subsequently, the Senate passed 
H.R. 5630, but amended it by removing the provision related to 
NRO launch contracts, despite the previous agreement of the 
conferees. Ultimately, the House passed the amended version of 
H.R. 5630, as adopted by the Senate, and the President signed 
the bill on December 27, 2000 (P.L. 106-567).

                        COMMITTEE INVESTIGATIONS

CIA Drug Trafficking Investigation

    In August 1996, the San Jose Mercury News published a 
series of articles regarding the introduction and distribution 
of crack cocaine into communities of Los Angeles. The article 
alleged that one of the drug trafficking rings responsible was 
operated by a Nicaraguan who used some of his drug profits to 
provide lethal and non-lethal assistance to the Contras. 
Furthermore, the Mercury News articles implied that CIA either 
backed, or at least condoned, the drug trafficking activity.
    Allegations of drug trafficking by individuals within the 
Contra movement were not new in August, 1996; however, the 
Mercury News articles brought these allegations into sharp 
focus and galvanized public opinion. For this reason, the 
Committee believed it needed to examine the charges raised by 
the Mercury News articles thoroughly and objectively.
    In performing its examination of the allegations and 
implications raised in the ``Dark Alliance'' series, the 
Committee reviewed CIA Inspector General Reports, Volume I and 
II, the DOJ Inspector General Report, the Los Angeles County 
Sheriff's Department investigation; tasked the Congressional 
Research Service for background data related to the Iran-Contra 
investigations; reviewed massive quantities of raw classified 
CIA files and reporting; conducted interviews in Washington, 
Los Angeles, and Nicaragua; attended and participated in two 
``town hall'' meetings in South Central Los Angeles; received a 
number of briefings; and held hearings.
    On May 11, 2000, the Committee released a detailed report, 
which concluded that evidence was not found to support the 
allegations put forth in the Mercury News ``Dark Alliance'' 
series. The Committee report was adopted unanimously (Committee 
Print, 106th Congress, February 2000, Report on the Central 
Intelligence Agency's Alleged Involvement in Crack Cocaine 
Trafficking in the Los Angeles Area.)
    In summarizing its findings, the Committee stated: ``The 
allegations of the Dark Alliance series warranted an 
investigation, and this Committee performed its role mindful of 
the tens of thousands of American lives that have been lost to 
the scourge of crack cocaine. Based on its investigation, 
involving numerous interviews, reviews of extensive 
documentation, and a thorough and critical reading of other 
investigative reports, the Committee has concluded that the 
evidence does not support the implications of the San Jose 
Mercury News--that the CIA was responsible for the crack 
epidemic in Los Angeles or anywhere else in the United States 
to further the cause of the Contra war in Central America.'' 
(HPSCI Press Statement, May 11, 2000.)

DOE Counterintelligence Failures

    In the wake of the report by the so-called Cox Committee 
\1\ on Chinese nuclear espionage and by the President's Foreign 
Intelligence Advisory Board (PFIAB) on security lapses at the 
Department of Energy's (DOE's) nuclear weapons laboratories, 
and in response to Presidential Decision Directive NSC 61 (PDD-
61),\2\ a comprehensive reform of counterintelligence (CI) at 
DOE was undertaken. This was accelerated and significantly 
refined in response to legislation proposed by Congress which, 
among other things, created the National Nuclear Security 
Agency (NNSA).
---------------------------------------------------------------------------
    \1\ House Select Committee on U.S. National Security and Military/
Commercial Concerns with the People's Republic of China.
    \2\ PDD-61 was issued on February 11, 1998 in response to reports 
from the General Accounting Office and from the Intelligence Community 
that found serious CI and security problems at DOE and its constituent 
laboratories.
---------------------------------------------------------------------------
    The Committee established a bipartisan investigative team 
in the first quarter of FY 2000 to examine the DOE's plan to 
improve its counterintelligence posture at its headquarters in 
Washington and its three key weapons laboratories. The purpose 
of the examination was to review the status of reforms and to 
examine issues still unresolved or under consideration. The 
team was headed by a special staff consultant, Mr. Paul 
Redmond, one of America's leading experts in CI and a former 
head of CI at the Central Intelligence Agency (CIA).
    In general, the review determined that DOE had made a good 
but inconsistent start in improving its CI capabilities. The 
most progress had been made in building an operational CI 
capability to identify and neutralize insider penetrations. The 
two areas of greatest shortcoming, either of which could derail 
the whole CI program, were in CI awareness training and in 
gaining employee acceptance of the polygraph program.
    The Review Panel's report was entitled: House Report No. 
106-687, Report of the Redmond Panel: Improving 
Counterintelligence Capabilities at the Department of Energy 
and the Los Alamos, Sandia, and Lawrence Livermore National 
Laboratories, June 21, 2000.

                         Hearings and Briefings

                     CLOSED HEARINGS AND BRIEFINGS

    Pursuant to the rules of the Committee (Committee Rule 
3(b)(c)), the Committee held 32 hearings and 29 briefings 
closed to the public on issues involving sensitive information, 
intelligence sources and methods, and national security.

                             OPEN HEARINGS

    During the 106th Congress, the Committee held an 
unprecedented number of open hearings on issues of concern to 
the Intelligence Community and the American people. Although 
committed to the protection of sources and methods and ensuring 
the security of our nation's secrets, it is the intention of 
the Committee, whenever possible, to hold open hearings in an 
unclassified setting on issues of vital importance and concern 
to the public.
    The Committee held seven open hearings on the following 
subjects:
          Biological Warfare Threats--March 3, 1999
          Encryption Legislation--June 9, 1999
          Space Launch Failures--June 15, 1999
          Encryption Legislation--July 14, 1999
          Chinese Embassy Bombing--July 22, 1999
          DOE Counterintelligence--February 16, 2000
          NSA Legal Authorities--April 12, 2000
Biological Warfare Threats
    On March 3, 1999, the Committee held an open hearing on 
international biological warfare threats and capabilities. 
Chairman Goss and Ranking Democrat Dixon pursued this issue in 
open session because they felt there was significant 
information that could be made available publicly to inform, 
not only Members of Congress but also the American public, 
about the significant dangers to national security brought 
about by biological weapons and delivery capabilities. The open 
hearing presented expert testimony with several witnesses 
including John Lauder, special Assistant to the Director of 
Central Intelligence for Nonproliferation; and Dr. Ken Alibek, 
former Deputy Chief of the civilian branch of the Soviet 
Union's offensive biological weapons program. This open hearing 
reinforced the Committee's view that robust intelligence is the 
key to understanding the threat of biological weapons and is 
vital to preventing their disastrous use.
Encryption Legislation
    During the 106th Congress, the Committee held two separate 
open hearings (June 9 and July 14, 1999) on the public policy 
debate surrounding proposed encryption legislation because of 
the serious national security and public safety interests at 
stake. It was the intention of the Committee to embrace a 
compromise approach revising the nation's encryption policies, 
balancing the commercial interest for expanded access to 
foreign markets with the concerns of national security and law 
enforcement. During these hearings, the Committee took 
testimony from Attorney General Janet Reno, FBI Director Louis 
Freeh, Deputy Secretary of Defense John Hamre, and several 
senior administration officials who expressed national security 
concerns with H.R. 850, the ``Security and Freedom through 
Encryption Act (SAFE) Act,'' During the Committee's 
consideration of H.R. 850, it was determined that the SAFE Act 
did not adequately address the negative impact such legislation 
would have upon law enforcement and national security despite 
the benefits it would bestow on U.S. business interests.
    Striking a balance between SAFE Act proponents and 
administration officials, the Committee concluded its hearings 
with the introduction of H.R. 2616, the ``Encryption for the 
National Interest Act,'' cosponsored by fifteen Members, 
Republican and Democrat. H.R. 2616 sought to establish a 
dynamic and constructive framework for continued cooperation 
between government and industry to achieve a workable solution 
for the encryption issue. The ``Encryption for the National 
Interest Act'' advanced the Committee's position that national 
security and the protection of Americans are a principal 
obligation of the federal government.
    At the same time, Chairman Goss also introduced H.R. 2617, 
as a companion bill. The ``Tax Relief for Responsible 
Encryption Act of 1999,'' proposed a tax incentive for the 
nation's encryption software manufacturers to develop products 
with recoverability features.
    In an effort to provide leadership on the encryption issue, 
and to focus on the important national security and high 
technology aspects of the issue, Chairman Goss, Ranking 
Democrat Dixon, and twenty-one other Members of the House from 
both sides of the aisle delivered a letter to President Clinton 
urging him to convene a summit of industry and government 
leaders to develop a consensus approach on encryption policy. 
However, on September 16, 1999, under mounting Congressional 
and industry pressure, the Administration announced new 
guidelines for the export of encryption products while 
promising to attempt a similar balanced approach to the 
concerns of national security and public safety.
    The key principles for national security outlined in the 
Administration's new proposal for export guidelines included 
(1) meaningful technical review of encryption products in 
advance of export; (2) a workable process for post-export 
reporting on end-use and end-users of encryption; and (3) the 
ability to deny exports to certain entities for national 
security reasons. The Committee found the new policy guidelines 
substantially mirrored the approach it championed on this 
issue.
Space Launch Failures
    In response to a string of space launch failures, the 
Subcommittee on Technical and Tactical Intelligence, under the 
leadership of Subcommittee Chairman Michael N. Castle, and 
Ranking Member Sanford Bishop, held a public hearing (June 15, 
1999) with testimony from NRO director Keith Hall, senior Air 
Force managers, and industry representatives from the launch 
program. The Committee felt a serious examination of launch 
vehicle production, oversight, and operations was necessary to 
get the root of these failures.
    Furthermore, the Committee had been frustrated with aspects 
of the NRO's launch program particularly with Titan IV 
production and the launch program's excessive over-funding. The 
committee had considerable difficulty holding any organization 
accountable for better program planning because the NRO has 
launch vehicle and launch services contracts written and 
managed by non-NRO contracting offices. As a result, the NRO 
did not have sufficient management responsibility for those 
contracts and could not be responsive to congressional 
concerns, nor take necessary corrective actions.
    In the wake of these launch failures and the information 
gathered through the public hearing, the Committee introduced 
legislation in its mark-up of the ``Intelligence Authorization 
Act for Fiscal Year 2001,'' which was subsequently agreed upon 
by the Senate conferees and included in the conference report 
to the bill (See H. Rept. No. 106-969).\3\ Section 501 of the 
conference report required that the NRO contract for vehicle 
acquisition and launch services directly with launch service 
providers. It is the decided view of the Committee that more 
direct control by the NRO over its vehicle acquisition and 
launch contracts will increase the accountability for such 
projects within the NRO. Unfortunately, despite previous 
agreement by the House and Senate conferees, the provision was 
inexplicably pulled by the Senate from the final bill. Although 
this provision was not included in the final version of the 
Intelligence Authorization Act for Fiscal Year 2001, the 
Committee intends to pursue the issue in the 107th Congress.
---------------------------------------------------------------------------
    \3\ This conference report was vetoed by President Clinton on 
November 4, 2000, for other reasons. See supra.
---------------------------------------------------------------------------
Chinese Embassy Bombing
    The Committee felt the accidental bombing of the Chinese 
Embassy in Belgrade, Yugoslavia, on May 7, 1999, was extremely 
important to discussion in a public forum despite the 
reluctance of the Administration so that the public could 
understand the complexity of the issue and that the bombing was 
the result of flaws in both the intelligence and targeting 
processes. The public hearing was held on July 22, 1999. The 
Committee provided more than ample time for the Administration, 
the Department of Defense, and the Intelligence Community to 
finalize their review of the incident and to prepare an 
assessment of the bombing that was appropriate for a public 
discussion. Meanwhile, to further its investigation and 
preparation for this hearing, Committee staff conducted 
interviews, sorted through the results of the various agency 
investigations, and reviewed the original documents used in the 
targeting.
    Director of Central Intelligence George Tenent and Deputy 
Secretary of Defense John J. Hamre provided testimony before 
the Committee and addressed the following key issues: the 
intelligence failure that led to the mistaken labeling of the 
Chinese Embassy in Belgrade; the flaws in the targeting process 
that allowed this initial failure to escape detection; and the 
corrective measures that have and can be implemented to prevent 
a repeat of a tragedy of this kind in the future. Further, the 
Committee questioned the policy underlying the attacks.
DOE Counterintelligence Issues
    Upon conclusion of its investigation into DOE security and 
counterintelligence issues, the Redmond Panel presented its 
conclusions before the Committee and provided its evaluation on 
the state of counterintelligence (CI) at the Department of 
Energy and its key weapons laboratories at Los Alamos, Sandia, 
and Lawrence Livermore. The scope of the team's investigation 
was to determine what has been done by the Department of Energy 
and its key constituent nuclear weapons laboratories to improve 
counterintelligence policy and practices in the wake of the 
nuclear espionage investigation at Los Alamos National 
Laboratory.
    In spite of progress in some areas, the Redmond Panel found 
unsettling the statements put forth by DOE Headquarters 
claiming that counterintelligence problems had been solved. 
Failures and deficiencies caused by decades of misfeasance and 
neglect cannot be fixed overnight. The real test for assessing 
the CI program will be its future success in catching spies and 
security violators. This area will remain a focus point for the 
Committee's oversight activities in succeeding Congresses.
NSA Legal Authorities
    Over the course of the 106th Congress, a growing amount of 
press attention was paid to the SIGINT (signals intelligence) 
activities of the National Security Agency. This press 
reporting generally focused on an alleged SIGINT collection 
program commonly referred to as ``Echelon.'' It was fueled, in 
part, by a report issued by the European Parliament, 
accusations put forth by the American Civil Liberties Union, 
and commentary in the press and elsewhere.
    The ``Intelligence Authorization Act for Fiscal Year 2000 
(P.L. 106-120, Section 309)'' required the submission of a 
classified and unclassified report on the legal authorities 
under which the NSA conducts its SIGINT activities. The 
Committee is in receipt of that document and its various 
appendices (Legal Standards for the Intelligence Community in 
Conducting Electronic Surveillance, February 1, 2000).
    Because of strong public interest in this matter, the 
Committee took the opportunity to discuss, in open session on 
April 12, 2000, the strict legal guidelines under which NSA 
operates and the role SIGINT has in the defense of our nation's 
security. In an unprecedented overview of the NSA's electronic 
surveillance activities, NSA Director Lieutenant General 
Michael Hayden; DCI George Tenet; and Representative Bob Barr 
testified before the Committee and discussed the regulations 
and the continued need for executive branch and HPSCI oversight 
of SIGINT activities of the NSA. Frances Fragos Townsend, 
Counsel for Intelligence Policy in the Office of Intelligence 
Policy and Review (OIPR) for the U.S. Department of Justice, 
testified as well about her office's role in control and 
oversight of the NSA's SIGINT activities under the Foreign 
Intelligence Surveillance Act (FISA).
    Notwithstanding the wide-ranging criticism of NSA, the 
Committee is certain that there is substantial congressional 
oversight of the NSA's activities. Likewise, the Committee 
found that executive branch regulations and policies, and 
administration oversight are appropriately stringent. It is the 
Committee's considered judgment that the NSA conducts its 
SIGINT mission within established and well-recognized 
constitutional limitations and consistently with statutory 
requirements.

                         COMMITTEE FACTFINDING

    In addition to the day-to-day oversight activities that the 
Committee performs, on-site examination and hands-on inspection 
of the Intelligence Community and its activities are essential 
in evaluating the Community's strengths and weaknesses. 
Monitoring the collection, operations, and military support 
elements of the Intelligence Community requires going beyond 
the U.S. borders and reviewing the nation's intelligence 
capabilities worldwide. During the 106th Congress, Committee 
Members and staff visited dozens of intelligence and 
intelligence-related facilities both within the U.S. and in 
numerous countries abroad.
    In February 1999, Committee Chairman Porter Goss traveled 
overseas and met with combat pilots aboard the USS Enterprise 
in the Mediterranean and at Incirlik Airbase in southern 
Turkey. The purpose of his trip was to assess the intelligence 
needs of U.S. pilots and to hear firsthand from our war 
fighters their view of the type of intelligence helpful to them 
in order to succeed in their missions.
    In July 1999, Representative Bass accompanied CODEL Young 
to South Korea and Japan. In South Korea, the Members 
investigated concerns regarding regional security issues 
affected by North Korea aggression and proliferation of weapons 
of mass destruction (WMD). The Members then traveled to Japan, 
an important strategic partner, and examined regional security 
and defense issues as well as economic cooperation among the 
two nations.
    In January 2000, Chairman Goss led a delegation of his 
Committee colleagues to Australia, New Zealand, and Hawaii. In 
Australia, the Members met with the counterparts of our DCI and 
our Directors of the FBI, CIA, DIA (Defense Intelligence 
Agency) and NIMA (National Imagery and Mapping Agency). In New 
Zealand the Members held discussions with the Prime Minister 
and the various members of Parliament who provide oversight of 
their nation's intelligence functions. In both countries, 
Members visited the National Parliaments and met with fellow 
Legislators to discuss bi-lateral intelligence issues. Stopping 
in Hawaii, the Members attended various briefings related to 
U.S. intelligence activities and discussed with U.S. military 
commanders national security concerns throughout the Pacific 
theater.
    In February 2000, Committee Members visited Moscow, Russia, 
and held meetings with Russian government officials on 
bilateral security issues. Members also met with U.S. Embassy 
personnel and discussed with them various aspects of U.S.-
Russia relations within the context of intelligence needs and 
requirements. The Members traveled thereafter to Munich, 
Germany, to attend an annual conference on security issues.
    In August 2000, Chairman Goss participated in the 
Presidential visit to Cartagena, Colombia. Accompanying Speaker 
Dennis Hastert and other Members of Congress in a show of 
support for President Pastrana and ``Plan Colombia'', Chairman 
Goss learned firsthand the importance of U.S. support to 
Colombia in its on-going struggle against the narco-guerrillas. 
In the wake of the signing of a significant U.S. counterdrug 
aid package for Colombia, this visit highlighted U.S. 
commitment to fostering democracy, regional security, and 
economic development in Colombia.

                                
